The National Retail Federation has been preparing for congestion at our nation’s ports for more than 15 years.
That’s how long ago we launched the Global Port Tracker, which counts the number of inbound containers processed at the largest ports used by U.S. retailers each month and forecasts how many are expected over the next six months. We can’t say we anticipated a pandemic when we issued the first report back in 2005. But the numbers compiled for us by Hackett Associates have certainly helped retailers assess the situation and plan accordingly over the past year-and-a-half.
The Global Port Tracker report has provided a clear, month-by-month measure of soaring consumer demand during the pandemic. The number of containers imported in a single month has been broken and then broken again over and over during the pandemic, often with double-digit year-over-year increases. And 2021 is expected to see a record 26 million containers for the full year. That would be up 18 percent over last year, which itself set a record despite the pandemic. And it would be up 20 percent over pre-pandemic 2019.
Those numbers come as NRF is forecasting record retail sales for 2021, up between 10.5 percent and 13.5 percent over 2020, and a record holiday season with sales up between 8.5 percent and 10.5 percent over the 2020 holiday season.
Unfortunately, the surge in demand, spending and imports comes at a price. The demand for both finished goods and raw materials has outpaced the supply of everything that is needed to move them through the supply chain. Ports have been jammed as merchandise arrives more quickly than it can be unloaded. Late last month, more than 70 ships were waiting to dock at the Ports of Los Angeles and Long Beach – which account for 40 percent of U.S. imports – and the wait at LA averaged two weeks.
Longshore workers have been unloading ships as fast as they can. The challenge has been moving containers out of the ports to make room for the next ship. Shortages of chassis to carry the containers, truck and rail capacity to haul them away, and warehouse space to haul them to have left containers sitting. Terminals’ policies for the return of empty containers also impact congestion. And labor shortages seen across the economy are affecting every link of the supply chain, particularly truck drivers and warehouse workers.
NRF has been doing more than just counting containers. The supply chain has always been one of our top priorities, and we’ve continually called for infrastructure spending to improve the roads, bridges, railroads and port facilities retailers rely on to move billions of dollars’ worth of goods each year.
During the pandemic, retailers have worked around the clock to keep products on their shelves, from realigning their sourcing to chartering their own ships, and NRF has been behind them at every step. We have called on President Biden to make the supply chain a top administration priority, and we were pleased to see him appoint nationally known infrastructure leader John Porcari as the nation’s first-ever “port envoy” this summer. We also welcomed a White House supply chain summit where NRF shared retailers’ concerns about the ongoing challenges.
Most recently, NRF launched the Save Our Shipments campaign calling for passage of the bipartisan infrastructure bill, the DRIVE SAFE Act to ease the shortage of truck drivers by setting up a pilot program for young drivers previously barred from interstate commerce, and the Ocean Shipping Reform Act to address longstanding unfair business practices by ocean carriers and port terminal operators.
Our SOS was answered, with Congress passing the infrastructure bill after incorporating the DRIVE SAFE pilot, leaving just passage of the Ocean Shipping Reform Act to complete the package.
But that’s not all that needs to be done. The administration needs to continue bringing stakeholders together to address the current supply chain disruptions and to create a true 21st century global supply chain. We need physical infrastructure improvements, and we also need information technology such as a national freight data portal where stakeholders could better share information and prepare for future disruptions.
Whether it’s moving cargo containers across the ocean or packages to consumers’ doorsteps, retailers are among the biggest shippers in the world. A successful retail industry depends on a successful supply chain.
–Matthew Shay, President and CEO, National Retail Federation
The NRF is the world’s largest retail trade association.